Did you recently take on (or consider) a loan of 84 months or longer on a car purchase?
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Dealer's Tricks - bait & switch, etc.
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But many shoppers don't like or don't understand the process of buying a car wisely, and are at the mercy of the salesman. So if the first offer comes in at $1,000 over invoice for the Grand Am, they may take it, or feel good if they get another $200 off, or if the payment is manageable. Some people say 'serves them right' for being uneducated consumers (I disagree).
But still, to answer your question above in #154, these are the people who are over-paying (getting 'ripped off' as you say).
That's not even getting into the case of the buyers that are sold all the expensive extras because they don't know any better; some salesman sees weakness, and he is off to the races. It happens, I know it, and I expect you do too. How often, percentage-wise? I wonder.
By the way, it looks like your post omitted the 'flat [amount?]' you make on a deal. Not that it is really any of my business.
ejp
When the jerk I worked for would market the car, he wouldn't disclose the damage and sold the car as a fit unit. Nothing like an extra 2-5K in a car deal, huh?
That's how he subsidized those $200 over invoice deals on the new ones.
My AVERAGE repair order (I was service manager)was over $1200! That was AFTER the body work! The GSM wanted me to do "final adjustments" as warranty repairs!
I know about the slow guy, though. After selling an alarm (as an F&I guy), we had a service guy that would schedule installation for a month down the road, then slide in some extra time on the install. Luckily, he didn't last long. I had a lot to do with that.
I agree with the deal where you slip the guy a 20 or 50 for working on your car, then you take care of him when he and his wife are car shopping. You have to take care of each other, otherwise it turns into a contest to see who can hurt who the most.
My favorite thing was when a salesman promised a customer something in service, then wrote his own "we owe", like those things don't get checked. I always enjoyed (maybe a little too much) the reaction of the sales manager when I took the "we owe" in to get signed. What a dog I am.
I'll quote a specific example:
$100 for spending 5 hours with the customer, waiting for him to choose which $4000 below MSRP Jetta he wanted; then having him leave before delivery because he had better things to do; then personally scavenging the lot for a battery, floor mats, a spare tire, and a rear view mirror because the car had been there so long that it was a donor for every other car that needed something; then personally installing all of the above; then driving the car 30 miles to deliver it to him with my wife following to drive me home on a Sunday when all my peers were selling cars, only to have him chew me up on the survey because the radio code was unavailable until the next day because the service dept. is closed on Sunday.
$100.
I hope he buys his next car on the Internet and that by then there is a "drop the car from the sky into my driveway" button for him to click on. I hope it lands on his head.
$100.
I have been burned several times by such customers. You bend over backwards to help them and not only do they not appriciate it they actually think you are bending over the other way.
Dealing with the public can be a real drag, no matter how positive and honest you may be. Definitely not for everyone. I would not have the patience.
ejp
The bad part about minis like that one is that I feel like a fish on a hook. I'd have given the deal away to someone else, but no one else would take it and the boss wouldn't let me stop working with the guy.
Other minis came from the same ad that offered $4000 off. I sold several of those cars, by explaining all the fine print in the ad right up front. Other people I lot dropped quickly when the fine print didn't meet their needs.
We currently have a 1998 Olds Intrigue that after we trade it in, we should be about $2,000 upside down on (owe $10,500, KBB says it is worth $8500). Don't ask...SOME people (my wife included) should never be allowed to purchase a new car without assistance. Anyway,I will pay off this balance, but it will leave me 0 to put down, save for $1100 GM Card dollars.
My question is, instead of a $600+ monthly payment with conventional financing, I am looking at the Smartbuy. What should I look out for? Where will the dealer try to screw me (and they WILL try to screw me)?? Anyone with any experience with GM Smartbuy, your help will be graetly appreciated. Thanks...
If the vehicle is used for business purposes you will get tax advantages on a Lease that you will not get on a Smartbuy.
Essentially, Smartbuy is a balloon.
Bill
Thanks.
ejp
If you use your vehicle for business purposes the percentage of the driving you do for business equates to the percentage of yor lease costs that can be written off.
I.E. You drive 15K miles/year, 10K of it is for business (Not commuting). Your lease payment is, say, $450/mo. You can then write off $300/mo of the payment.
Again, a very very broad and rough definition.. you'd want to talk to your CPA but it works well for me.
Bill
Probably most people ignore these limits, but they could be a problem if returns are audited (although I don't know how diligent IRS is in enforcing them). As you say, brentwoodvolvo, people need to consult their CPA.
Mr. Goodnews
for which dealerships to approach and which to avoid? I live in eastern North Carolina. Thanks!
Good luck, there currently are good rebates on '02 Corollas.
If you lease, you can't use the Mileage method, but must keep track of all your costs and use the Actual Expense method. PITA, and I don't know how strictly IRS enforces this.
ejp
-You now CAN take the Mileage method (versus the Actual Expense method) to write off leased vehicle expenses, but once you choose it, you must use that method each year you have that leased vehicle.
[And bear in mind that the Mileage method allows a whopping 32.5 cents/mile for 2000, a ridiculously low figure, and that is to include virtually ALL auto expenses.]
-What I remembered as the "Lease Value Adjustment" is called the "inclusion" amount, whereby if the car is valued new at over $15,500 ("luxury"), you must add back (a decrease) to your lease expense deduction an amount according to an IRS table which is based on the value of the vehicle (the more expensive the vehicle, the more you add back, decreasing your deduction).
I'm sure this is endlessly fascinating to all you folks - not. Still, I gave outdated info, and I wanted to correct it. As always, you should discuss this with your CPA.
ejp
Example: GC SE MSRP $27,490. It had a "Dodge Discount" of $300 from Total Before Discount on sticker of $27,790. The college grad and small business was $800 for the 2. Subtract the $800 and $300 from MSRP to get actual price of $22,590 which was in reality $4900 off MSRP. The trade-in was $3500. Sales tax was paid on the $19,090 amount....and was correctly calculated as $1212.22 at State rate of 6.35 %. All dealerships in this area charge "Documentation Fees" of about $250.
The Dodge dealer charged $247.50 which is displayed above every salesman's desk. Another "Temporary Permit" fee of $6. State Waste Tire Recycling Fee of $2.50. License fee of $38.50.
Seem honest? What about the subtraction of $300 "Dodge Discount" twice? First to get the Total Price of bottom line of sticker. Second to take off the bottom line AFTER it was taken off Total Before Discount. The dealership also makes money from the "Documentation Fee". They also made about $3000 on resale of the trade in which they sold within 2 hours of trade...with no clean up, etc. It is getting more difficult all the time to cut through the BS to purchase a New or Used vehicle in this area. I did not completely realize the actual cost of the trade until I analyzed things more fully at a later date.
This forum will greatly help any potential buyer who reads the excellent information provided here.
Thanks
Then you can generally assume to be at the top tier.
You have outstanding credit from the sounds of it.
Bill
I am in outside sales and travel about 20-25k mi. a yr, mostly business, I had been doing mileage, but as I get closer to my next new car purchase I am trying to more carefully select my options. Lease vs. Purchase. Based on what I've seen, unless I go to a factory subvented lease deal like Bill had suggested to me once on a Volvo, w/ high mile lease, another car I was looking at is an Acura TL-S (a little over $30k), and although they have a decent lease factor, it makes sense for me to purchase the car running the numbers.
UNLESS there is a substantial savings in my deduction options on the lease. By the time you figure in pmt, gas, insurance is a big one, and other expenses, if I can write off more of that, it may make sense. If anyone one would care to shed further light on this subject or point me in the right direction (how much should it cost to get advice from a CPA, etc.), I would GREATLY APPRECIATE IT. Thanks,
Karz
Can you get a lease that allows 20-25k miles per year? I mean, one that does not cost an arm and three legs?
And remember, a deduction (generally) is only an allowance for money for which you are out of pocket. Big deductions mean big dollars spent, with the tax 'advantage' only a fraction (i.e. your tax rate) of that.
Common sense rules still apply. Don't spend more than you can afford.
ejp
The car of my choice was a 1996 or 1997 Toyota Camry. I went to a Pasco-based Toyota dealer. There was a brand new 1997 Camry on the lot, the only one they have. I test drove and liked it. The salesman that met with me did the usual sales chat. After 2 hours of back-and-forth haggling on price and options, we finally arrived at a price of $20,000 + tax, license, etc... The car was a V6 with moon roof and a few extras...
Just as I thought the deal was done, in walked the Sales Manager who promptly told me that the sales man was only a "rookie" and didn't know waht he was doing and the deal was not good for them. He asked to show me the invoice on the car plus some stuff... Essentially, he told me we were back to square one with him now in cahrge of hashing out a deal with me.
I told him that after 2 hours of haggling, I was in no mood to start another one, and rather will walk. He grabbed me and pleaded with me to stay awhile and that everything will be worked out... Another 1 hour later, we were right back once again to the same spot with no agreement on price. I told him enough ! I was walking. He pleaded and prodded to take a little bit off here or there. Little bit like $100 or so, on a 20K car. I said no dice and walked.
I walked right across to the Nissan dealer across the street and within 30 minutes drove off in a 1996 Nissan Maxima. I paid $22K for it without a sweat.
Suffice to say, two months later the Toyota dealership was sold to a new owner and they made many overtures to the city to try to rectify the bad image of the previous ownership. 6 months later when my wife wanted a car, we went right back to the same Nissan dealership and purchased another 1996 Nissan Altima, with no haggling at all. Loved that dealership a whole lot. They made buying a car so much easier on the customer, and the whole buying process was easy, at least for me.
reading this forum has shown me a few more pointers in my next purchase, which, hopefully will come soon enough. Still waiting for the '02's to come in and hoping for a fire-sale of the '01's on the lots.... we can hope can't we ?
The State of Washington has everything: Ocean, Mountains, Desert, nice people.
Spent a couple of summer camps at Ft. Lewis myself courtesy of the U.S. Army who had the decency to not send me to Vietnam. Came VERY close when our medical unit was almost activated.
I'm not surprised that the Nissan dealer made it easy for you.
i was pricing a 1997 Camry (the new design), with a V6, mooroof and alloy wheels, for $20,000 + tax+ lic + del/doc fees. the total would have come to ca. 23,500 out-the-door.
i bought a 1996 maxima (w/700 demo miles), with alloy, leather and moonroof, for $22K out-the-door.
now which deal is better ? for me, it was the nissan deal.
so i went back 6-months later and bought a fairly used 1996 altima (with 9K miles) for $12K out-the-door, in October 1996. a great deal at the time. 4.5 years later i sold the same altima, with 62k miles for $7,500. not bad at all, i would say.
That way, there isn't much room to depreciate. Old cars get to a certain point and stay there. If your almost new Altima only cost about 11K, how much can it go down if a 10 year old 90K equivilant car will still fetch 3,000 if it is clean?
2020 Acura RDX tech SH-AWD, 2023 Maverick hybrid Lariat luxury package.
Tonight I'm about ready to seal a deal on an Audi A4 1.8 when they take it next door to the Volvo dealer (had been there today getting my 3rd sunroof but that's another story!!!). Volvo offered me $13.5K 10 days ago on a possible trade for a new S60. Today they offer Audi $10K for my car!! What's up? Heck, they even made Honda look good. To say I was PO'd was an understatement. Went over to talk the Volvo salesman I've been dealing with (sales mgr who did the appraisal conveniently had just left) and he admitted their offer was "on the low side" but said their manager was not playing games and trying to kill my deal - yeah, right!
On the way home I stopped at CarMax - they appraised it at $12.5 less their fee. 2 months ago and 4K miles ago they appraised it at $13K so it only dropped $500. How in heck can Volvo drop their offer $3,500 in 10 days! I know that Volvo wouldn't offer the same price since I wasn't buying from them but geez.... sounds like I'm being punished because, as a 19 yr Volvo owner, I refuse to pay them $30K+ for a new S model when their reliability issues the past few yrs are well known.
They don't know how much goodwill they have lost and I will NEVER recommend the Volvo dealer in San Antonio to anyone! So much for loyalty, eh?
: )
Mackabee